Mediating role of leadership and group capital between human capital component and sustainability of horticultural agribusiness institutions in Indonesia

Abstract

Farmers’ institutions are currently more cultural and primarily oriented only to getting government facilities. Farmers’ institutions have not been directed at utilizing access to various technological information, capital, and markets needed to develop horticultural agribusiness. Nevertheless, almost all farmers’ institutions exist in rural areas, but not all existing institutions can survive and carry out their functions sustainably. The research objective was to examine the impact of human capital through leadership and group capital on the sustainability of horticultural agribusiness institutions. The study was carried out at Uluere District, Bantaeng Regency, which is designated as a horticulture agribusiness development zone in South Sulawesi, Indonesia. The sample selection was conducted using a simple randomized method, where 10% of the overall population was chosen. This method resulted in a sample size of 233 respondents for this study. The data gathering was done during September and November of 2022. Moreover, to acquire findings about the effect of human capital on the long-term viability of institutional agribusiness horticulture, we conducted an analysis using the Structural Equation Modeling (SEM) method. The findings indicated that individual capability, individual motivation, organizational climate, and workgroup effectiveness were key factors of human capital that directly impact institutional strengthening. These factors were found to have positive and statistically significant connections. In addition, leadership and group capital connected the many aspects of human capital to the sustainability of horticultural agribusiness. The results of this study will significantly enhance ongoing efforts to formulate a plan aimed at mitigating rural development challenges, especially in Indonesia.